Friday, June 24, 2011

Suits

NYSE Euronext (NYX.N) and Deutsche Boerse AG (DB1Gn.DE), in settling U.S. shareholder lawsuits challenging their roughly $9 billion merger, acknowledged the suits were a factor in the decision this month to pay a special dividend.According to an agreement filed on June 17 with the Delaware Chancery Court, the exchange operators would pay shareholders 2 euros (US$2.84) per share outstanding of the combined holding company after the planned merger is completed. [ID:nN1E75M1WJ]It reflects a $910 million special dividend that NYSE Euronext and Deutsche Boerse announced on June 7, to be paid upon the closing of a merger that would create the world's largest exchange operator. [ID:nLDE75621Z]The New York Stock Exchange parent, whose ticker symbol is NYX, said the lawsuits "were a factor in the NYX Board decision to support management's recommendation" that the combined company declare the dividend, according to the agreement.The agreement requires court approval, and would end shareholder lawsuits in New York and Delaware state courts.

Shareholders had sued NYSE Euronext shortly after that company announced its planned sale to its German counterpart in February. They complained that the takeover price was too low, and that the company should have courted other bidders.The settlement sheds some light on why the companies announced the special dividend, beyond the need to secure shareholder approval for the merger. Nasdaq OMX Group (NDAQ.O) and IntercontinentalExchange Inc (ICE.N) dropped an unsolicited counteroffer for NYSE Euronext last month."We are pleased to have this matter behind us," NYSE Euronext spokesman Rich Adamonis said in an email. "Our sole focus remains on our upcoming shareowner vote, and working toward the successful conclusion of the merger."NYSE Euronext shareholders are scheduled to vote on the merger on July 7. Deutsche Boerse shareholders, who would get roughly 60 percent of the combined company, have until July 13 to tender their shares.The combined company would operate in the United States and across Europe. A closing is expected by year end.According to the agreement, the shareholders settled to avoid delays and uncertainties from continued litigation. (1 euro = $1.42)